ACT announces Tax policy

“Tourism-heavy regions like Otago are disproportionately short on infrastructure, despite the huge tax dividends they’re passing to central government,” says Mr Seymour.

“Tourism is now the country’s single biggest earner, but the regions producing this profit aren’t allowed to keep the tax revenue needed to upgrade infrastructure.

“ACT has a policy to automatically fund infrastructure in the areas of greatest need, like Queenstown.

“Councils already record the value of building consents. ACT would simply return half the GST from these consents to the local council for use on vital infrastructure projects. This means funding would automatically be allocated to productive regions, instead of getting collected by Wellington and divvied out in political favours.

“This would mean a big boost in infrastructure funding for the Otago region, which punches above its weight in building consents due to pressure from tourism and migration. In fact, with building consents valued at over $3.5 billion over the last 12 months, ACT’s policy would mean an extra $266 million for Otago infrastructure.

“Every other party pretends infrastructure will fix itself. Only ACT has a clear, costed, workable solution to chronic under-funding of infrastructure.”

Apart from the fact that ACT will probably not make this a bottom line policy for the purposes of a coalition deal, and therefore voting ACT may not get you this at all, there seems to be a number of things worth mentioning.

It doesn’t really matter that it comes from GST or from general taxation.  In the end, it is money that the Government would have spent.  All this does is ring fence it in a way that is somewhat proportional to where the newest investment goes.

This is of course not a natural ACT policy in the sense that this is a redistribution of wealth rather than focusing on reducing the tax take so that people can decide how to spend their own money.

The other problem is that it will need legislation to force local authorities to actually spend this money on public infrastructure projects and to spend it wisely.

And that’s where the whole thing really falls apart.

Areas that are already under huge pressures but are not under heavy further development wouldn’t get much money even though they need it, and cities like Auckland would probably push it all straight into the rail loop being thankful someone in central government finally opened up a new money tap.



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